The present invention relates to an accounting processor and method for an automated management control system, and more particularly, to an accounting processor and method for an automated management control system which can perform an accounting operation on a real-time basis by simply inputting transaction data without specific accounting knowledge, by systematically standardizing, formulating and compounding the transaction data.
An automated accounting processing system collects, adjusts, sums and accounts for financial data by systemizing transaction items n an enterprise using a computer to supply financial information useful for an executive's or a user's decision making. In other words, the automated accounting processing system automatically performs a real-time execution of transactions which bring about a change in the financial state, such as production, purchasing, sales, distribution and financial activities.
An accounting process for supplying various decision makers with financial information of the enterprise occurs through a series of procedures from transaction creation to closing. FIG. 1 shows a typical transaction flow and a computerized accounting procedure flow according to computerized business activities of a manufacturer.
For the sake of explanation, sequential numerals are given to arrows representing transaction data and flow in the respective steps of a transaction flow shown in FIG. 1, and the transaction flow and computerized accounting procedure will be briefly explained in the order of the numbers. Here, numeral 1 represents a production order, numeral 2 represents a raw and auxiliary material supply request, numeral 3 represents a raw and auxiliary material purchase order sheet, numeral 4 represents raw and auxiliary material supply from a supplier, numeral 5 represents raw and auxiliary material supply from a purchasing department to a production department, numeral 6 represents merchandise distribution to a distribution department, numeral 7 represents a merchandise production report, numeral 8 represents a payment request sheet, numeral 9 represents a payment approval notice, numeral 10 represents a payment to supplier, numeral 11 represents a purchase request sheet, numeral 12 represents a delivery order, numeral 13 represents an order confirmation notice, numeral 14 represents ordered merchandise delivery, numeral 15 represents a delivery confirmation document (receipt), numeral 16 represents a buyer's payment, and numeral 17 represents a sales money receipt notice, respectively. A series of Business activities by a manufacturer take place in various forms and ways according to the department. In this example, the explanation will be made concerned wit the work float between a production department and a purchasing department, its accounting procedure, initiated by creation of transaction with suppliers of raw and auxiliary materials, creation of transactions between a sales department and a buyer (or customer), and its accounting procedure.
Nowadays, most manufacturers enjoying the advantages of well-developed computer technology have a data network among various departments or divisions so that a considerable portion of businesses related with managerial activities are processed using a computer system. For example, in all businesses with regular customers, transaction data including product sales, supply requests of raw and auxiliary materials or payment approval, are transmitted and received by using a computer network. In a business with a customer not linked to a computer system, the transaction data are exchanged by other communications means such as a facsimile machine or telephone, or by mail.
In a production activity which is the primary activity of an enterprise for pursuing profits, a distribution department (or a distribution management system 150) sends a Production order 1 to a production department (or a production management system 100) for maintaining the optimal inventory of commodities to be sold by a sales department "or a sales management system 135). Based on the production order 1, the production department (production management system 100) checks the inventory of raw and auxiliary materials through a purchasing department (purchase management system 110) before production of requested merchandise. Then, if there is no inventory of the raw and auxiliary materials, a raw and auxiliary material supply request 2 is sent to the purchasing department (purchasing management system 110) for merchandise production.
The purchasing department (purchasing management system 110) sends a raw and auxiliary material purchase order sheet 3 to a raw and auxiliary material supplier 115 (or a supplier's computer system) for supplementing the shortage, based on the raw and auxiliary supply request 2 sent from the production department.
The supplier 115 supplies raw and auxiliary materials to the purchasing department (purchasing management system 110) of the manufacturer, based on the raw and auxiliary material purchase order sheet 3 sent from the purchasing department (purchasing management system 110). The received raw and auxiliary materials are inspected and approved by the purchasing department (purchasing management system 110) and then are supplied to a production line of the production department (production management system 100) to complete production. Then, the produced commodities are inspected and then supplied to the distribution department (distribution management system 150). Also, the production department 100 sends a merchandise production report 7 to the accounting department 160. Then, the accounting department 160 performs an accounting process using the merchandise production report 7, based on accounting principles, inputs and stores the account-processed data.
The supplier 115 sends a payment request sheet 8 for requesting payment for the supplied commodities to the purchasing department 110 of the enterprise. Then, the purchasing department 110 sends a payment approval notice 9 to the supplier 115 and the accounting department 160, respectively, to execute payment to the supplier 115.
The accounting department 160 executes an accounting process on the purchase money of the raw and auxiliary materials, to be paid to the supplier 115 under payment terms prescribed with the supplier 115, according to accounting principles, based on the payment approval notice 9 sent from the purchasing department 110, inputs and stores the accounting-operated data.
Also, the accounting department (accounting management system 160) remits the money to the bank account of the supplier 115 or pays the money to the supplier 115 in the form of checks or notes under payment terms prescribed with the supplier 115. The main activities of the sales department (sales management system 135) are to sell commodities to a customer, i.e., a buyer, 140. To buy required commodities, the customer sends a purchase request sheet 11 to the sales department (sales management system 135). At the customer's request, the sales department (sales management system 135) checks the inventory of the requested merchandise in the distribution department (distribution management system 105) using a computer system and then inputs the inventory results to the sales management system 135.
A delivery order 12 for the ordered merchandise from the customer 140, prepared by the sales department (sales management system 135), is sent to the distribution department (distribution management system 150). The sales department (sales management system 135) sends an order confirmation notice 13 indicating that the customer's order has been confirmed to the distribution department (distribution management system 150). Then, the distribution department (distribution management system 150) delivers the ordered merchandise to the customer 140, receives a delivery confirmation document (receipt) 15 from the customer 140, and inputs the data into the distribution management system 150, by which it is notified or certified that the order of the customer has been accepted and the delivery has been completed.
The distribution department (distribution management system 150) sends the delivery confirmation notice (or receipt 15) received from the customer 140 to the sales department (sales management system 135) and the accounting department (accounting management system 160), respectively. The sales department inputs the delivery confirmation data to the sales management system 135. The accounting department executes accounting process on the sales money and delivered merchandise and inputs the accounting data to the sales management system 135 to then be stored. The customer 140 transfers the money for the commodities to the bank account of the enterprise (manufacturer) or pays the money in the form of checks or notes, according to the terms of the trade prescribed mutually.
The data corresponding to the sales money received from the customer 140 is input to the sales management system 135 of the sales department to deduct the corresponding amount from the receivables of the customer 140. Then, a sales money receipt notice 17 is sent to the accounting department for an accounting process and input to the accounting management system 160 to then update data. In such a manner, the business activities of the enterprise are undertaken repeatedly through transaction creation, processing, updating and termination. Although not exactly the same, most enterprises have a transaction flow similar to that as described above. Particularly, the accounting process of the transaction created by production, sales, financial activities is a requisite job of an enterprise. An accounting department executes an accounting process on created transaction according to accounting principles, based on evidences and transaction items, and performs a series of jobs up to financial closing.
FIG. 2 shows a series of accounting circulations according to a created transaction.
As shown in FIG. 2, a series of the accounting processes of an enterprise are executed from transaction creation, to transaction data collection, adjustment, summing and accounting process, to data input to a commuter system, to preparation of financial statements and to Financial closing, which will now be described in more detail.
Generally, in terms of an accounting process, transaction brings about change in assets, liabilities and stock holder's equity, income or expense creation. For example, if an enterprise purchases a computer system, this is referred to as transaction creation because there is a change in the assets of the enterprise, for which an accounting process is executed by a conventional manual method, not by a computerized accounting process of today, as follows.
The transaction creation is recorded in an accounting book, which is initiated by a manual entry operation in a journal. To journalize the transaction, it is first confirmed whether the transaction has brought about a change in any item of assets, liabilities and capital of an enterprise, or profits and expenses have occurred. Then, the extent of the change or occurrence must be measured in a monetary unit. For example, if an enterprise (X) sells 500 pieces of a merchandise (A) at a price of 11,000 (unit price 10,000) on credit, the entry operation is executed as follows:
______________________________________ (Debit) (Credit) ______________________________________ Trade receivables: 5,500,000 Sales: 5,500,000 (Enterprise X) (500 pieces of merchandise A) cost: 5,000,000 Merchandise A: 5,000,000 (500 pieces of merchandise A) (500 pieces of merchandise A) ______________________________________
As demonstrated above, the entry is composed of at least one or more debit items (left hard side of transaction account) and credit items (right hard side of transaction account). Each sum of the debit and credit is always equal according to double entry bookkeeping principles. Transaction data is recorded (entered) in the entry book in the order of dates of transaction created.
If the manual entry operation is completed in such a manner, an entry or recordation for preparation of an accounting report must be made. Before the introduction or computerized accounting systems, most accounting jobs were performed manually. In other words, a series of work jobs were performed by manual entry operations for making a journal, a ledger, a general ledger, trial balance sheets, financial statements. However, according to the rapid development of computer systems, keeping accounts and preparing financial statements and account closing reports can be achieved just by inputting transaction data to a computerized data processing system, instead of manual recordation of accounting data, through a series of procedures including data recordation, assortment, calculation, processing and storage.
The computerized accounting process shown in FIG. 2 will now be described in more detail. If a transaction is created and then transaction evidence documents are prepared, data conversion occurs for inputting the transaction data to a medium recordable by a computer or a memory unit of the computer. As an input medium, a diskette, a magnetic tare or a magnetic disc can be used. Otherwise, data may he directly input to the computer through an on-line terminal.
The input data makes up a transaction file. The transaction file serves as a journal. The accounting process is executed based on the transaction file. The transaction file is mainly used for updating a master file and is sometimes used for searching the contents of the master file.
According to the respective records of the transaction file, records of the master file are added, deleted or modified. The master file serves as a subsidiary ledger and a general ledger as well as a journal. By using the updated master file, necessary information can be viewed, searched or queried. Also, the account closing reports can ne prepared based on the updated master file. The master file is kept as a permanent file.
FIG. 3 shows a general accounting process, i.e., a flow diagram of a journalizing process, which will now be described. First, if a transaction is created (step 300), money is received or paid, accordingly. That is to say, payment is made for purchase and money receipt is made for sales. According to the transaction created, sorting of payment and receipt is performed (step 310). According to the sorted transaction form, accounts to be entered are established (step 320). The establishment of the accounts must be made precisely, based on accounting principles. Then, a determination is made as to which of either debit side or credit side the established accounts is to be entered, according to double entry bookkeeping principles (step 330). If the debit side and the credit side are determined, the amount by account is determined (step 340) and then accounts are divided into the debit side and the credit side to then complete journalization according to the accounting principles (step 350). Then, data for the contents journalized in the accounting processing system are input (step 360), and the input data are processed by a computer system to then prepare various ledgers, financial statements and financial closing reports and to complete the closing (step 370).
A balancing operation is to deal with or terminate transactions leading to a change in created transaction items by respective accounts, i.e., assets, liabilities and capital, which are not processed or terminated by the operation at the past transaction time. The balanced accounts are referred to as the balance by the respective accounts of assets, liabilities and capitals.
FIG. 4 is a flow diagram of a general procedure of the balancing operation in an accounting process, which will now be described in detail.
If a transaction to be balanced in the accounting process (step 400), accounts to be balanced are fixed (step 410), and the transaction to be balanced is journalized by the fixed accounts (step 420). The journalized transaction is sorted by account (step 430). The accounts corresponding to the transaction to be balanced are confirmed by the accounting processing system and input thereto (step 440). Then, the balancing operation is performed (step 450).
As described above, to execute the accounting process for complicated and various transactions, one must be equipped with specific accounting knowledge. In other words, to effect the accounting process according to a change in assets, liabilities or capitals, or creation of a transaction in profits and expenses, the detailed contents of the transaction occurring in variable and complicated manner in enterprise activities should be analyzed and confirmed. Then, the transaction details must be journalized precisely according to accounting principles, and the journalized transaction details should be input to the accounting processing system, which can be handled only by skilled accounting specialists. In other words, the accounting job is too difficult and complicated to be handled by ordinary people having little or no accounting knowledge.
Further, the transaction patterns of an enterprise are variable according to business types and the transaction occurs in various manners, with transaction data unceasingly created and extinguished. If the transaction is created, accounting transaction evidence documents are generated as the transaction evidence. Based on the transaction evidence documents, an accountant of the enterprise must journalize precise accounts summed up and sorted according to accounting principles, which are obtained from the accounting information on the created transaction, and must input the journalized accounts to the accounting processing system. If the accounting process is performed in such a manner as described above through a series of procedures, the generation of several data errors is unavoidable.
Also, the accuracy of the conventional accounting process depends upon the practical knowledge and skills of the accountant, and a skilled supervisor must verify the accounting process. Thus, the accounting process of the conventional accounting process is ineffective and has limits in dealing with a tremendous amount of iterative transaction data promptly and precisely.
Further, much time is required in the balancing operation. First of all, items for the transaction created in the past must be processed accurately.
Many enterprises use various kinds of Management Information Systems (MIS) custom-developed in-house. However, they still have basic problems in performing an automatic accounting process for all their businesses to be linked with the transactions occurring in various departments of the enterprise. Generally, the MIS deals with management control operations including purchase management, production management, sales management, fund management, and customer service management, in a multiple manner.
The management control operations includes purchase management for treating business affairs concerned with goods purchase, production management for handling business affairs concerned with production, sales management for handling business affairs concerned with goods sales, fund management for handling and managing the all transactions occurring during the financial activities, and customer service management for controlling the customers, buyers or suppliers. These various management control operations occurring during management activities are individually performed or inter mingle with one another, as shown in FIG. 1. However, the accounting processes for the respective departments are not coordinately linked with one another. Thus, the accounting closing for numerical notation of management activities is not effectively performed by coordinately linking the transactions for the entire management control operations.
Particularly, as shown in FIG. 1, in performing the accounting process for the various business affairs concerned with the business management activities, if the transaction data created at various departments (production, purchase, sales, distribution, etc.) are not automatically processed by the personnel in charge of the respective business carts using a computerized accounting system, transaction evidence documents for the created transaction data must be transferred to the accounting department using a network or other communication means. Then, the accountant must input data for the transferred vouchers to the accounting processing system according to the accounting principles. By doing so, the accounting process and accounting closing may be delayed. Further, the accounting process, which can be achieved by only inputting transaction data once through a computerized accounting system, must be performed at least twice. That is, the transaction data created in the respective departments is not account-processed at the same time with once-input transaction data, on a real time basis. Thus, it is difficult to achieve effective business management control.